Two rate schedules run in parallel, and keeping them straight is the heart of retirement tax planning:
| Rate schedule | What it taxes | Rates | Ch. |
|---|---|---|---|
| Ordinary income | Traditional 401(k)/IRA withdrawals, pensions, annuity income, wages, interest, short-term gains, and the taxable portion of Social Security. | 10 · 12 · 22 · 24 · 32 · 35 · 37% | 11 |
| Long-term capital gains & qualified dividends | Gains on assets held > 1 year in a taxable brokerage, plus qualified dividends. Stacks on top of ordinary income but taxed on its own gentler schedule. | 0 · 15 · 20% | 6, 11 |
1 · Ordinary-income tax brackets
Find the band your taxable income lands in; each rate applies only to the dollars within that band. The dollar figures are the 2026 inflation-adjusted brackets.
Single
| Rate | Taxable income |
|---|---|
| 10% | $0 – $12,400 |
| 12% | $12,400 – $50,400 |
| 22% | $50,400 – $105,700 |
| 24% | $105,700 – $201,775 |
| 32% | $201,775 – $256,225 |
| 35% | $256,225 – $640,600 |
| 37% | over $640,600 |
Married filing jointly (and qualifying surviving spouse)
| Rate | Taxable income |
|---|---|
| 10% | $0 – $24,800 |
| 12% | $24,800 – $100,800 |
| 22% | $100,800 – $211,400 |
| 24% | $211,400 – $403,550 |
| 32% | $403,550 – $512,450 |
| 35% | $512,450 – $768,700 |
| 37% | over $768,700 |
Head of household
| Rate | Taxable income |
|---|---|
| 10% | $0 – $17,700 |
| 12% | $17,700 – $67,450 |
| 22% | $67,450 – $105,700 |
| 24% | $105,700 – $201,775 |
| 32% | $201,775 – $256,200 |
| 35% | $256,200 – $640,600 |
| 37% | over $640,600 |
Married filing separately
| Rate | Taxable income |
|---|---|
| 10% | $0 – $12,400 |
| 12% | $12,400 – $50,400 |
| 22% | $50,400 – $105,700 |
| 24% | $105,700 – $201,775 |
| 32% | $201,775 – $256,225 |
| 35% | $256,225 – $384,350 |
| 37% | over $384,350 |
Why your top bracket isn't your tax rate
A single retiree has $60,000 of taxable income. Being "in the 22% bracket" does not mean a $13,200 tax bill — each band is taxed at its own rate:
| Band | Taxed at | Tax |
|---|---|---|
| First $12,400 | 10% | $1,240 |
| $12,400 – $50,400 ($38,000) | 12% | $4,560 |
| $50,400 – $60,000 ($9,600) | 22% | $2,112 |
| Total federal income tax | $7,912 |
That's a 13.2% effective rate even though the marginal rate — what the next dollar withdrawn would cost — is 22%. Tax planning runs on the marginal rate (it prices your next Roth conversion or withdrawal); your budget runs on the effective rate.
2 · Standard deduction
Subtract this from income before reading the brackets above. Nearly all retirees take the standard deduction rather than itemizing.
| Filing status | 2026 standard deduction |
|---|---|
| Single | $16,100 |
| Married filing jointly / surviving spouse | $32,200 |
| Head of household | $24,150 |
| Married filing separately | $16,100 |
3 · Extra deductions for age 65+ (and the blind)
This is where retirees pull ahead. Three separate add-ons stack on top of the base standard deduction:
| Add-on | 2026 amount | Who qualifies |
|---|---|---|
| Age / blindness additional standard deduction | $2,050 (single / HoH) $1,650 (per married spouse) | Each condition counts separately — a single filer who is both 65+ and blind gets it twice; a married 65+ spouse who is also blind gets $1,650 × 2. |
| Senior bonus deduction (temporary, tax years 2025–2028) | $6,000 per person 65+ | New under the 2025 One Big Beautiful Bill Act. Phases out above $75,000 MAGI (single) / $150,000 (joint), at 6% of the excess, and disappears entirely by ~$175k / ~$250k. Available whether you itemize or not. |
How much a 65+ retiree shields before owing a dime
Stack the base deduction, the age add-on, and the temporary bonus:
| Component | Single, 65+ | MFJ, both 65+ |
|---|---|---|
| Base standard deduction | $16,100 | $32,200 |
| Age 65+ additional | $2,050 | $3,300 |
| Senior bonus (through 2028) | $6,000 | $12,000 |
| Income shielded at 0% | $24,150 | $47,500 |
A single 65-year-old can pull roughly $24,150, and a couple both 65+ about $47,500, of ordinary income before any federal income tax applies — then the 10% and 12% bands stretch well beyond that. For many middle-income retirees this zeroes out federal tax on a large slice of income. It's a limited-time window: plan Roth conversions and bracket-filling around it while the $6,000 bonus lasts (2025–2028).
4 · Long-term capital-gains & qualified-dividend rates
Assets held longer than a year, and qualified dividends, ride this separate, gentler schedule. Crucially, gains stack on top of your ordinary income — it's your total taxable income that decides which gains rate applies. Keep ordinary income low in a given year and you can realize gains at 0%.
| Rate | Single | Married filing jointly | Head of household | Married filing separately |
|---|---|---|---|---|
| 0% | up to $49,450 | up to $98,900 | up to $66,200 | up to $49,450 |
| 15% | $49,450 – $545,500 | $98,900 – $613,700 | $66,200 – $579,600 | $49,450 – $306,850 |
| 20% | over $545,500 | over $613,700 | over $579,600 | over $306,850 |
Thresholds are measured on total taxable income (ordinary income plus the gains themselves). A separate 3.8% Net Investment Income Tax applies to investment income once modified AGI exceeds $200,000 (single) / $250,000 (joint) — those two thresholds are fixed in law and not indexed to inflation. See Chapter 6 and Chapter 11 for how to harvest gains inside the 0% band.
5 · When Social Security itself becomes taxable
Not a bracket, but a threshold table the guide leans on constantly: how much of your Social Security benefit is pulled into ordinary income depends on your "combined income" (AGI + tax-exempt interest + ½ of your benefits). Unlike almost everything else here, these thresholds are fixed in law and have never been indexed to inflation — so more retirees cross them every year (the "tax torpedo," Chapter 11).
| Share of benefits that becomes taxable | Single / HoH | Married filing jointly |
|---|---|---|
| 0% taxable | under $25,000 | under $32,000 |
| up to 50% taxable | $25,000 – $34,000 | $32,000 – $44,000 |
| up to 85% taxable | over $34,000 | over $44,000 |
"Up to 85%" is a ceiling on the share of benefits taxed, not a tax rate — the included amount is then taxed at your ordinary rate from the tables above. Married filing separately (if you lived with your spouse) generally has a $0 threshold, taxing benefits almost immediately.
Figures are the 2026 inflation-adjusted federal amounts (IRS Rev. Proc. 2025-32, with senior-deduction rules from the 2025 One Big Beautiful Bill Act). Brackets and deductions reset annually with inflation; the Social Security and Net Investment Income Tax thresholds do not. State income tax is separate — see Chapter 22. Nothing here is personalized financial, tax, or legal advice; confirm current-year figures and your own situation with a CPA or the IRS before acting.